|Bid||125.72 x 800|
|Ask||126.25 x 1200|
|Day's Range||125.76 - 125.85|
|52 Week Range||107.37 - 125.92|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||6.68%|
|Beta (5Y Monthly)||1.01|
|Expense Ratio (net)||0.19%|
Investors say the divergence between higher inflation expectations and falling inflation-adjusted interest rates can't last forever.
Inflation is a natural occurrence in the market economy and a disciplined investor can begin planning for inflation by cultivating ideas for asset classes that do well during inflationary climates. In fact, many people have looked to gold as an "alternative currency," particularly countries whose currency is losing value.
Market expectations for inflation have increased lately on upbeat October consumer inflation data, global policy easing including by the Fed, a soaring stock market and easing recessionary fears.
The feeding frenzy on bonds in 2019 saw an unprecedented appetite for safe haven debt like Treasury notes, which subsequently pushed yields down to record levels. To some market experts, that appetite is just the tip of the iceberg.
Bond fund outflows continue, as seen in funds such as the iShares 20+ Year Treasury Bond ETF (TLT B-). Whether or not this will continue was a segment on Monday’s ETF Edge show with CNBC’s Bob Pisani.
With the Federal Reserve backing a looser monetary policy, bond ETF investors will have to contend with an eventual rise in inflation.
With the Federal Reserve backing a looser monetary policy, bond ETF investors will have to contend with an eventual rise in inflation. Market measures of inflation expectations have increased in recent weeks after receding fears of a near-term recession and growing preferences for riskier assets, the Wall Street Journal reports. Based on the spread between the yields of 10-year U.S. government debt and Treasury inflation-protected securities of similar maturity, investors expectations for the average inflation rate over the next 10 years has risen to about 1.7 percentage points, compared to 1.55 percentage points at the end of last month.
Investors have been piling in on bonds to seek refuge from the recent market volatility, but is core bond exposure enough? Should they start looking to other avenues of the bond market for more returns? “I think a core starting point for investors adding fixed-income exposure to their portfolios would be to think about the short- and intermediate-term core bond categories,” said Morningstar's director of personal finance Christine Benz. “So, the idea there is that you are getting pretty low returns--and it will ebb and flow based on the time period--not great returns, but you're getting great stabilization for your portfolio.
What are the countries with the highest inflation rates in the world? Inflation is one of the indicators of a country’s economic state, representing a percentage change in the general level of prices for goods and services paid by consumers (for consumer price index) and producers (for producer price index). A higher inflation rate means lower […]